Dr Miftah Ismail said on Tuesday that Pakistan required the IMF’s help to get out of the economic crisis since it is facing a major difficulty in funding a record budget deficit of Rs6.4 trillion and a $20 billion current account deficit this fiscal year.
Miftah, who is expected to be named finance minister at least until Senator Ishaq Dar returns to the country, said the new government would honor all international commitments made by the previous PTI administration, including the IMF program, because the country did not have any other option at the moment.
Miftah, who was speaking at a press conference alongside other party officials, said the country needed the IMF’s help to finance a record budget deficit of Rs6.4 trillion and a $20 billion current account deficit this fiscal year.
He also stated that Prime Minister Shehbaz Sharif would decide on the destiny of the governor of the State Bank of Pakistan (SBP) and did not rule out a rise in the price of petroleum goods.
“Discussions with the IMF will be on a give-and-take basis, as quitting the global lender’s programme will have major ramifications for the country’s exchange rate, foreign loan repayments, and bonds traded on secondary capital markets.”
According to data published by the finance ministry, the budget deficit will reach over Rs6.4 trillion, or 10% of GDP, by the end of this fiscal year if spending continue at their current rate.
“It will be the largest budget deficit in absolute terms and in terms of GDP ever recorded.”
Miftah revealed that the budget deficit was roughly Rs1.5 trillion higher than expected, and that former finance minister Shaukat Tarin was aware of this, but had never told the people the truth.
He blamed the previous PTI government for planting “landmines” that forced the new government to remain in the IMF program.